AUSTIN, Texas--(BUSINESS WIRE)--USA Compression Partners, LP (NYSE: USAC) (“USA Compression” or the
“Partnership”) announced today its financial and operating results for
the first quarter 2018. A net loss of $15.4 million was recognized for
the first quarter of 2018, compared to net income of $4.5 million for
the fourth quarter of 2017 and $1.6 million for the first quarter of
2017. In the first quarter of 2018, the net loss was primarily due to
non-recurring transaction expenses related to the CDM Acquisition. Net
cash provided by operating activities was $36.4 million for the first
quarter of 2018, compared to $39.3 million for the fourth quarter of
2017 and $18.3 million for the first quarter of 2017.

Adjusted EBITDA was $44.1 million for the first quarter of 2018,
compared to $42.1 million for the fourth quarter of 2017 and $36.0
million for the first quarter of 2017. Distributable Cash Flow was $33.7
million for the first quarter of 2018, compared to $33.2 million for the
fourth quarter of 2017 and $27.2 million for the first quarter of 2017.

“The first quarter got off to a great start for USA Compression, with
continued encouraging fundamentals in the compression services industry
leading to an increase in service revenues of approximately 6%, and an
increase in active horsepower of 61,000, or about 4% over the fourth
quarter,” commented Eric D. Long, USA Compression’s President and Chief
Executive Officer. “Our Distributable Cash Flow Coverage Ratio continues
to improve and was 1.03x for the quarter. We continue to see high
utilization of our deployed fleet of approximately 95%; furthermore, the
lead times for large horsepower equipment, currently about 12 months,
are expected to remain long for the foreseeable future. This tightness
in the compression marketplace has put upward pressure on service rates
across all of our categories of equipment, and we have also taken the
opportunity to term-up some of the month-to-month contracts in selected
regions.”

“Our customers are ramping up activity levels meaningfully, which is
driving increasing demand for our largest horsepower assets. For the
balance of 2018, we have commitments to take delivery of approximately
150,000 horsepower, including orders from CDM Resource Management. We
recently committed to an additional 50,000 horsepower for delivery in
the first half of 2019. Consistent with our business model strategy
these commitments consist of very large horsepower units. A significant
portion of the 2018 deliveries are already under contract with our
customers, and we expect our first tranche of 2019 units to go quickly,”
he added.

“In the midst of this strong market for our compression services, in
January, we announced a transformative transaction with the Energy
Transfer family that resulted in USA Compression acquiring CDM Resource
Management, Energy Transfer’s compression business, for consideration of
approximately $1.7 billion, and Energy Transfer acquiring our general
partner. At closing in early April, this transaction brought together
two like-minded service providers with high quality assets, and provides
USA Compression expansion into regions in which we were historically
underrepresented. We expect the combined business, which will continue
to focus on large horsepower serving infrastructure applications, to
benefit from the positive trends in our industry. Integration of the two
businesses is underway and is progressing better than expected.”

Average revenue generating horsepower was 1,662,896 for the first
quarter of 2018, compared to 1,602,365 for the fourth quarter of 2017
and 1,406,206 for the first quarter of 2017. Average revenue per revenue
generating horsepower per month was $15.60 for the first quarter of
2018, compared to $15.21 for the fourth quarter of 2017 and $14.98 for
the first quarter of 2017.

Revenues were $77.7 million for the first quarter of 2018, compared to
$75.4 million for the fourth quarter of 2017 and $66.0 million for the
first quarter of 2017. Gross operating margin was $52.2 million for the
first quarter of 2018, compared to $50.3 million for the fourth quarter
of 2017 and $43.5 million for the first quarter of 2017. Gross operating
margin as a percentage of total revenues was 67.1% for the first quarter
of 2018, compared to 66.8% for the fourth quarter of 2017 and 65.9% for
the first quarter of 2017. We recognized an operating loss of $6.1
million for the first quarter of 2018, compared to operating income of
$11.5 million for the fourth quarter of 2017 and $7.4 million for the
first quarter of 2017. In the first quarter of 2018, the operating loss
was primarily due to non-recurring transaction expenses related to the
CDM Acquisition.

Expansion capital expenditures were $50.4 million, maintenance capital
expenditures were $2.0 million and cash interest expense, net was $8.5
million for the first quarter of 2018.

On April 19, 2018, the Partnership announced a cash distribution of
$0.525 per unit on its common units. This first quarter distribution
corresponds to an annualized distribution rate of $2.10 per unit. The
distribution will be paid on May 11, 2018 to unitholders of record as of
the close of business on May 1, 2018. For the first quarter of 2018, the
Partnership’s Distributable Cash Flow Coverage Ratio was 1.03x and Cash
Coverage Ratio was 1.03x.

Operational and Financial Data

Three Months Ended

March 31,

December 31,

March 31,

2018

2017

2017

Operational Data

Fleet Horsepower (at period end)

1,847,416

1,799,781

1,739,379

Revenue Generating Horsepower (at period end)

1,686,170

1,624,377

1,427,634

Average Revenue Generating Horsepower

1,662,896

1,602,365

1,406,206

Revenue Generating Compression Units (at period end)

2,843

2,830

2,612

Horsepower Utilization (at period end) (1)

94.7

%

94.8

%

89.9

%

Average Horsepower Utilization (for the period) (1)

94.9

%

94.7

%

88.2

%

Financial Data ($ in thousands, except per
horsepower data)

Revenue

$

77,739

$

75,385

$

66,032

Average Revenue Per Revenue Generating Horsepower Per Month (2)

$

15.60

$

15.21

$

14.98

Net income (loss)

$

(15,370

)

$

4,546

$

1,552

Operating income (loss)

$

(6,087

)

$

11,527

$

7,368

Net cash provided by operating activities

$

36,394

$

39,343

$

18,286

Gross Operating Margin (3)

$

52,196

$

50,340

$

43,510

Gross Operating Margin Percentage

67.1

%

66.8

%

65.9

%

Adjusted EBITDA (3)

$

44,069

$

42,111

$

36,003

Adjusted EBITDA Percentage

56.7

%

55.9

%

54.5

%

Distributable Cash Flow (3)

$

33,725

$

33,223

$

27,223

________________________

(1)

Horsepower utilization is calculated as (i) the sum of (a) revenue
generating horsepower; (b) horsepower in the Partnership’s fleet
that is under contract but is not yet generating revenue; and (c)
horsepower not yet in the Partnership’s fleet that is under
contract, not yet generating revenue and is subject to a purchase
order, divided by (ii) total available horsepower less idle
horsepower that is under repair.

Horsepower utilization based on revenue generating horsepower and
fleet horsepower at each applicable period end was 91.3%, 90.3% and
82.1% for the quarters ended March 31, 2018, December 31, 2017 and
March 31, 2017, respectively.

Average horsepower utilization based on revenue generating
horsepower and fleet horsepower was 91.4%, 90.0% and 80.9% for the
quarters ended March 31, 2018, December 31, 2017 and March 31, 2017,
respectively.

(2)

Calculated as the average of the result of dividing the contractual
monthly rate for all units at the end of each month in the period by
the sum of the revenue generating horsepower at the end of each
month in the period.

As of March 31, 2018, the Partnership was in compliance with all
covenants under its $1.1 billion revolving credit facility. As of March
31, 2018, the outstanding balance under the revolving credit facility
was $819.1 million. On April 2, 2018, in connection with the closing of
the CDM Resource Management transaction, the Partnership increased the
size of its revolving credit facility from $1.1 billion to $1.6 billion,
as well as reset the tenor for another 5 years and reset the leverage
covenant levels.

As of March 31, 2018, the outstanding aggregate principal amount of
6.875% senior notes was $725.0 million.

Full-Year 2018 Outlook

USA Compression is updating its full-year 2018 guidance to incorporate
the expected results of CDM Resource Management after closing on April
2, 2018:

Net loss range of $50.0 million to $30.0 million;

A forward-looking estimate of net cash provided by operating
activities is not provided because the items necessary to estimate net
cash provided by operating activities, in particular the change in
operating assets and liabilities, are not accessible or estimable at
this time. The Partnership does not anticipate the changes in
operating assets and liabilities to be material, but changes in
accounts receivable, accounts payable, accrued liabilities and
deferred revenue could be significant, such that the amount of net
cash provided by operating activities would vary substantially from
the amount of projected Adjusted EBITDA and Distributable Cash Flow;

Adjusted EBITDA range of $310.0 million to $330.0 million; and

Distributable Cash Flow range of $170.0 million to $190.0 million.

Conference Call

The Partnership will host a conference call today beginning at
11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss first
quarter 2018 performance. The call will be broadcast live over the
Internet. Investors may participate either by phone or audio webcast.

By Phone:

Dial 888-394-8218 inside the U.S. and Canada at least 10 minutes
before the call and ask for the USA Compression Partners Earnings
Call. Investors outside the U.S. and Canada should dial
323-701-0225. The conference ID for both is 6059010.

A replay of the call will be available through May 20, 2018. Callers
inside the U.S. and Canada may access the replay by dialing
888-203-1112. Investors outside the U.S. and Canada should dial
719-457-0820. The conference ID for both is 6059010.

By Webcast:

Connect to the webcast via the “Events” page of USA Compression’s
Investor Relations website at http://investors.usacompression.com.
Please log in at least 10 minutes in advance to register and
download any necessary software. A replay will be available shortly
after the call.

About USA Compression Partners, LP

USA Compression Partners, LP is a growth-oriented Delaware limited
partnership that is one of the nation’s largest independent providers of
compression services in terms of total compression fleet horsepower. The
Partnership partners with a broad customer base composed of producers,
processors, gatherers and transporters of natural gas and crude oil. The
Partnership focuses on providing compression services to infrastructure
applications primarily in high-volume gathering systems, processing
facilities and transportation applications. On April 2, 2018, the
Partnership closed its previously announced transactions with the Energy
Transfer family, including, among other things, the Partnership’s
purchase of Energy Transfer’s compression business and Energy Transfer’s
purchase of 100% of the limited liability company interests in the
Partnership’s general partner. More information is available at
usacompression.com.

Management views Adjusted EBITDA as one of its primary management tools,
and the Partnership tracks this item on a monthly basis both as an
absolute amount and as a percentage of revenue compared to the prior
month, year-to-date, prior year and budget. The Partnership defines
EBITDA as net income (loss) before net interest expense, depreciation
and amortization expense, and income tax expense. The Partnership
defines Adjusted EBITDA as EBITDA plus impairment of compression
equipment, impairment of goodwill, interest income on capital lease,
unit-based compensation expense, severance charges, certain transaction
fees, loss (gain) on disposition of assets and other. Adjusted EBITDA is
used as a supplemental financial measure by management and external
users of its financial statements, such as investors and commercial
banks, to assess:

the financial performance of the Partnership’s assets without regard
to the impact of financing methods, capital structure or historical
cost basis of the Partnership’s assets;

the viability of capital expenditure projects and the overall rates of
return on alternative investment opportunities;

the ability of the Partnership’s assets to generate cash sufficient to
make debt payments and to make distributions; and

the Partnership’s operating performance as compared to those of other
companies in its industry without regard to the impact of financing
methods and capital structure.

Management believes that Adjusted EBITDA provides useful information to
investors because, when viewed with U.S. generally accepted accounting
principles (“GAAP”) results and the accompanying reconciliations, it
provides a more complete understanding of the Partnership’s performance
than GAAP results alone. Management also believes that external users of
its financial statements benefit from having access to the same
financial measures that management uses in evaluating the results of the
Partnership’s business.

Adjusted EBITDA should not be considered an alternative to, or more
meaningful than, net income (loss), operating income (loss), cash flows
from operating activities or any other measure of financial performance
or liquidity presented in accordance with GAAP as measures of operating
performance and liquidity. Moreover, Adjusted EBITDA as presented may
not be comparable to similarly titled measures of other companies.

Gross operating margin is defined as revenue less cost of operations,
exclusive of depreciation and amortization expense. Management believes
that gross operating margin is useful as a supplemental measure of the
Partnership’s operating profitability. Gross operating margin is
impacted primarily by the pricing trends for service operations and cost
of operations, including labor rates for service technicians, volume and
per unit costs for lubricant oils, quantity and pricing of routine
preventative maintenance on compression units and property tax rates on
compression units. Gross operating margin should not be considered an
alternative to, or more meaningful than, operating income (loss), its
most directly comparable GAAP financial measure, or any other measure of
financial performance presented in accordance with GAAP. Moreover, gross
operating margin as presented may not be comparable to similarly titled
measures of other companies. Because the Partnership capitalizes assets,
depreciation and amortization of equipment is a necessary element of its
costs. To compensate for the limitations of gross operating margin as a
measure of the Partnership’s performance, management believes that it is
important to consider operating income (loss) determined under GAAP, as
well as gross operating margin, to evaluate the Partnership’s operating
profitability. A reconciliation of gross operating margin to operating
income (loss) is provided in this news release.

Distributable Cash Flow should not be considered as an alternative to,
or more meaningful than, net income (loss), operating income (loss),
cash flows from operating activities or any other measure of financial
performance presented in accordance with GAAP as measures of operating
performance and liquidity. Moreover, our Distributable Cash Flow as
presented may not be comparable to similarly titled measures of other
companies.

Management believes Distributable Cash Flow is an important measure of
operating performance because such measure allows management, investors
and others to compare basic cash flows the Partnership generates (prior
to any retained cash reserves established by the Partnership’s general
partner and the effect of the DRIP) to the cash distributions the
Partnership expects to pay its unitholders.

Distributable Cash Flow Coverage Ratio, a non-GAAP measure, is defined
as Distributable Cash Flow less cash distributions to be paid to the
Partnership’s general partner and incentive distribution rights (“IDRs”)
in respect of such period, divided by distributions declared to limited
partner unitholders in respect of such period. Cash Coverage Ratio is
defined as Distributable Cash Flow less cash distributions to be paid to
the Partnership’s general partner and IDRs in respect of such period,
divided by cash distributions expected to be paid to limited partner
unitholders in respect of such period, after taking into account the
non-cash impact of the DRIP. Management believes Distributable Cash Flow
Coverage Ratio and Cash Coverage Ratio are important measures of
operating performance because they allow management, investors and
others to gauge the Partnership’s ability to pay cash distributions to
limited partner unitholders using the cash flows the Partnership
generates. The Partnership’s Distributable Cash Flow Coverage Ratio and
Cash Coverage Ratio as presented may not be comparable to similarly
titled measures of other companies.

This news release also contains a forward-looking estimate of Adjusted
EBITDA and Distributable Cash Flow projected to be generated by the
Partnership in its 2018 fiscal year. A forward-looking estimate of net
cash provided by operating activities and reconciliations of the
forward-looking estimates of Adjusted EBITDA and Distributable Cash Flow
to net cash provided by operating activities are not provided because
the items necessary to estimate net cash provided by operating
activities, in particular the change in operating assets and
liabilities, are not accessible or estimable at this time. The
Partnership does not anticipate the changes in operating assets and
liabilities to be material, but changes in accounts receivable, accounts
payable, accrued liabilities and deferred revenue could be significant,
such that the amount of net cash provided by operating activities would
vary substantially from the amount of projected Adjusted EBITDA and
Distributable Cash Flow.

Some of the information in this news release may contain forward-looking
statements. These statements can be identified by the use of
forward-looking terminology including “may,” “believe,” “expect,”
“intend,” “anticipate,” “estimate,” “continue,” or other similar words,
and include the Partnership’s expectation of future performance
contained herein, including as described under “Full-Year 2018 Outlook.”
These statements discuss future expectations, contain projections of
results of operations or of financial condition, or state other
“forward-looking” information. You are cautioned not to place undue
reliance on any forward-looking statements, which can be affected by
assumptions used or by known risks or uncertainties. Consequently, no
forward-looking statements can be guaranteed. When considering these
forward-looking statements, you should keep in mind the risk factors
noted below and other cautionary statements in this news release. The
risk factors and other factors noted throughout this news release could
cause actual results to differ materially from those contained in any
forward-looking statement. Known material factors that could cause the
Partnership’s actual results to differ materially from the results
contemplated by such forward-looking statements are described in Part I,
Item 1A (“Risk Factors”) of the Partnership’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2017, which was filed with the
Securities and Exchange Commission on February 13, 2018, and include:

changes in general economic conditions and changes in economic
conditions of the crude oil and natural gas industry specifically;

competitive conditions in the industry;

changes in the long-term supply of and demand for crude oil and
natural gas;

our ability to realize the anticipated benefits of acquisitions and to
integrate acquired assets with our existing fleet, including the CDM
Acquisition;

actions taken by the Partnership’s customers, competitors and
fourth-party operators;

other factors discussed in the Partnership’s filings with the
Securities and Exchange Commission.

All forward-looking statements speak only as of the date of this news
release and are expressly qualified in their entirety by the foregoing
cautionary statements. Unless legally required, the Partnership
undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise. Unpredictable or unknown factors not discussed herein also
could have material adverse effects on forward-looking statements.

The following table reconciles Adjusted EBITDA to net income
(loss) and net cash provided by operating activities, its most
directly comparable GAAP financial measures, for each of the
periods presented:

Three Months Ended

March 31,

December 31,

March 31,

2018

2017

2017

Net income (loss)

$

(15,370

)

$

4,546

$

1,552

Interest expense, net

9,219

6,896

5,674

Depreciation and amortization

25,112

25,110

24,151

Income tax expense

70

90

149

EBITDA

$

19,031

$

36,642

$

31,526

Impairment of compression equipment

—

163

1,112

Interest income on capital lease

351

372

431

Unit-based compensation expense (1)

2,239

3,548

2,945

Transaction expenses for acquisitions (2)

21,731

1,406

—

Severance charges

1,041

22

62

Other

—

258

171

Gain on disposition of assets

(324

)

(300

)

(244

)

Adjusted EBITDA

$

44,069

$

42,111

$

36,003

Interest expense, net

(9,219

)

(6,896

)

(5,674

)

Income tax expense

(70

)

(90

)

(149

)

Interest income on capital lease

(351

)

(372

)

(431

)

Non-cash interest expense

704

545

547

Transaction expenses for acquisitions

(21,731

)

(1,406

)

—

Severance charges

(1,041

)

(22

)

(62

)

Other

—

(258

)

(171

)

Changes in operating assets and liabilities

24,033

5,731

(11,777

)

Net cash provided by operating activities

$

36,394

$

39,343

$

18,286

________________________

(1)

For the quarters ended March 31, 2018, December 31, 2017 and March
31, 2017, unit-based compensation expense included $0.8 million,
$0.5 million, and $0.8 million, respectively, of cash payments
related to quarterly payments of distribution equivalent rights on
outstanding phantom unit awards and $0.3 million, $0 and $0.4
million, respectively, related to the cash portion of any settlement
of phantom unit awards upon vesting. The remainder of the unit-based
compensation expense for each period presented in 2018 and 2017 was
related to non-cash adjustments to the unit-based compensation
liability.

(2)

Represents certain transaction expenses related to potential and
completed acquisitions. The Partnership believes it is useful to
investors to exclude these fees.

The following table reconciles Distributable Cash Flow to net
income (loss) and net cash provided by operating activities, its
most directly comparable GAAP financial measures, for each of the
periods presented:

Three Months Ended

March 31,

December 31,

March 31,

2018

2017

2017

Net income (loss)

$

(15,370

)

$

4,546

$

1,552

Plus: Non-cash interest expense

704

545

547

Plus: Non-cash income tax expense

20

90

109

Plus: Depreciation and amortization

25,112

25,110

24,151

Plus: Unit-based compensation expense (1)

2,239

3,548

2,945

Plus: Impairment of compression equipment

—

163

1,112

Plus: Transaction expenses for acquisitions (2)

21,731

1,406

—

Plus: Severance charges

1,041

22

62

Plus: Proceeds from insurance recovery and other

613

258

171

Less: Gain on disposition of assets

(324

)

(300

)

(244

)

Less: Maintenance capital expenditures (3)

(2,041

)

(2,165

)

(3,182

)

Distributable Cash Flow

$

33,725

$

33,223

$

27,223

Plus: Maintenance capital expenditures

2,041

2,165

3,182

Plus: Changes in operating assets and liabilities

24,033

5,731

(11,777

)

Less: Transaction expenses for acquisitions

(21,731

)

(1,406

)

—

Less: Severance charges

(1,041

)

(22

)

(62

)

Less: Other

(633

)

(348

)

(280

)

Net cash provided by operating activities

$

36,394

$

39,343

$

18,286

Distributable Cash Flow

$

33,725

$

33,223

$

27,223

Less: Cash distributions to general partner and IDRs (4)

—

754

749

Distributable Cash Flow attributable to limited partner interest

$

33,725

$

32,469

$

26,474

Distributions for Distributable Cash Flow Coverage Ratio (5)

$

32,783

$

32,652

$

32,119

Distributions reinvested in the DRIP (6)

$

175

$

304

$

6,635

Distributions for Cash Coverage Ratio (7)

$

32,608

$

32,348

$

25,484

Distributable Cash Flow Coverage Ratio (8)

1.03

0.99

0.82

Cash Coverage Ratio (9)

1.03

1.00

1.04

________________________

(1)

For the quarters ended March 31, 2018, December 31, 2017 and March
31, 2017, unit-based compensation expense included $0.8 million,
$0.5 million and $0.8 million, respectively, of cash payments
related to quarterly payments of distribution equivalent rights on
outstanding phantom unit awards and $0.3 million, $0 and $0.4
million, respectively, related to the cash portion of any settlement
of phantom unit awards upon vesting. The remainder of the unit-based
compensation expense for each period presented in 2018 and 2017 was
related to non-cash adjustments to the unit-based compensation
liability.

(2)

Represents certain transaction expenses related to potential and
completed acquisitions. The Partnership believes it is useful to
investors to exclude these fees.

(3)

Reflects actual maintenance capital expenditures for the period
presented. Maintenance capital expenditures are capital expenditures
made to maintain the operating capacity of the Partnership’s assets
and extend their useful lives, replace partially or fully
depreciated assets or other capital expenditures that are incurred
in maintaining the Partnership’s existing business and related
operating income.

(4)

The Equity Restructuring Agreement, dated January 15, 2018, by and
among us, our general partner and Energy Transfer Equity, L.P.,
completed on April 2, 2018, converted the general partner interest
into a non-economic general partner interest and cancelled the IDRs
in exchange for the issuance of 8,000,000 common units to the
Partnership’s general partner. As a result, no cash distribution
will be paid with respect to the general partner interest and IDRs
for the quarter ended March 31, 2018 or in future periods.

(5)

Represents distributions to the holders of the Partnership’s common
units as of the record date for each period, excluding the common
units issued in connection with the consummation of the CDM
Acquisition on April 2, 2018. For the quarter ended March 31, 2018,
the actual distribution to holders of the Partnership’s common units
as of the record date was $47.2 million, reflecting the common units
issued on April 2, 2018 related to the CDM Acquisition.

(6)

Represents distributions to holders enrolled in the DRIP as of the
record date for each period. The amount for the quarter ended March
31, 2018 is based on an estimate as of the record date.

(7)

Represents cash distributions declared for common units not
participating in the DRIP for each period. For the quarter ended
March 31, 2018, the amount excludes the common units issued in
connection with the consummation of the CDM Acquisition on April 2,
2018.

(8)

For the quarter ended March 31, 2018, the Distributable Cash Flow
Coverage Ratio based on actual common units outstanding as of the
record date, including common units issued in connection with the
consummation of the CDM Acquisition on April 2, 2018, was 0.71x.

(9)

For the quarter ended March 31, 2018, the Cash Coverage Ratio based
on actual common units outstanding as of the record date, including
common units issued in connection with the consummation of the CDM
Acquisition on April 2, 2018, was 0.72x.